Dormant companies—accounts and audit
Dormant companies—accounts and audit

The following Corporate guidance note provides comprehensive and up to date legal information covering:

  • Dormant companies—accounts and audit
  • Brexit impact
  • What is a dormant company?
  • Why have a dormant company?
  • Obligations of a dormant company
  • Dormant company—accounts and audit
  • Dormant company exemption from the requirement to prepare accounts
  • Dormant company exemption from the requirement to file accounts
  • Parent undertaking guarantee
  • Dormant company exemption from the requirement to audit accounts
  • more

A dormant company is constituted and managed in the same way as any other company. However, the requirements relating to accounts and audit that generally apply to a company are relaxed in relation to a dormant company.

Brexit impact

The UK corporate reporting framework may be affected by Brexit. For further details of its impact, see Brexit—accounts and reports. The UK audit regime may also be affected by Brexit. For further details of its impact, see Brexit—statutory audit.

What is a dormant company?

A company is dormant during any period in which it has had no significant accounting transaction.

A significant accounting transaction is one which the company should enter in its accounting records pursuant to section 386 of the Companies Act 2006 (CA 2006) and does not include:

  1. any transaction arising from the taking of shares in the company by a subscriber to the memorandum of association as a result of an undertaking of his in connection with the formation of the company, or

  2. any transaction consisting of the payment of:

    1. a fee paid to Companies House on a change of the company's name

    2. a fee paid to Companies House on the re-registration of a company

    3. a penalty paid in relation to the late filing of annual accounts under CA 2006, s 453, or

    4. a fee paid to Companies